The price of Bitcoin has skyrocketed following the Federal Reserve’s decision yesterday to cut interest rates, and traders who shorted Bitcoin are being wiped out by a growing wave of liquidations.
The price of the largest digital coin now stands at $63,199 per coin after surging more than 6% in 24 hours, CoinGecko shows.
Over the past day, more than $154 million worth of short positions have been liquidated across all cryptocurrencies, according to data from CoinGlass. Of that, nearly $74 million were Bitcoin positions.
Short positions are held by traders who bet on the future decline in the price of an asset. If a short position is liquidated, the trader has lost his bet and his position is closed.
The rest of the cryptocurrency market is also up significantly. Ethereum’s price currently stands at $2,437 per coin, having increased by more than 6% in the last 24 hours. Over $33 million in positions shorting the asset’s price have been closed.
The Federal Reserve cut interest rates by 50 basis points on Wednesday, after raising them to a 23-year high in 2022. Bitcoin and other cryptocurrencies, as well as crypto and tech stocks, have since risen accordingly. Riskier investments such as digital assets and U.S. stocks tend to perform better in a low-interest-rate environment.
Bitcoin hit an all-time high of $73,737 in March thanks to the landmark approval of exchange-traded funds (ETFs) that offer traditional investors exposure to the currency. But it has struggled to reach that level again since.
Stocks typically do poorly in September, the data shows, and Bitcoin has broadly followed that trend: It’s the worst month on average for the asset over the past 11 years. But October and November are historically boom months for Bitcoin, and the so-called Uptober swing could start early due to the Fed.
Edited by Andrew Hayward
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